A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

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Plenty of Budget Room

This year’s $1.35 trillion tax cut was a good first step toward fixing the federal tax system. The cut lowers income tax rates and excessively high tax levels. Individual income taxes peaked at 10.4 percent of gross domestic product in 2001, up from 7.7 percent in 1992. This ratio will fall to 9.4 percent when the tax cut is fully phased-in, which is an improvement, but still higher than historical norms.

Serious problems with the tax code remain. The new law only took baby steps in fixing the marriage penalty, the tax code bias against savings, and the alternative minimum tax (AMT). The complex AMT, which was originally aimed at the rich, will hit 36 million families by 2010 if not reformed. Many prestigious groups, such as the American Bar Association, have called for AMT repeal. With three-quarters of the 10-year, $5.6 trillion budget surplus remaining, there is plenty of room for these and other reforms.

It is true that new figures will show lower surplus estimates because of the slowing economy. But who’s to say we won’t be surprised a year from now with faster than expected growth and rising surpluses? After all, the official projection for the 2001 surplus jumped from $177 billion in January 2000 to $281 billion in January 2001.

Also note that government estimates don’t account for the positive feedback of pro-growth tax cuts. With lower tax rates, taxpayers increase earnings, undertake more entrepreneurship, and evade taxes less. As a result, the government only loses about 75 cents for every $1 of official cuts. The $1.35 trillion cut will actually cost the government just $1 trillion.

Besides, putting needed tax reforms on hold because the economy is slowing places the cart before the horse. A simpler and more efficient tax system will create economic gains for years to come. These gains will ensure continued budget surpluses as long as Congress keeps a lid on spending. So let’s not put an artificial straightjacket on further tax cuts, as there is plenty of budget room and much to be done.